If you invest in natural resources, by now you have heard of the term “Freedom Check”. Matt Badiali a long-time investment expert in the natural resources world. So what are Freedom Checks exactly? Is Matt Badiali right, are they worth investing in? Well, we are setting out to answer all of these questions and more in this article. Visit the website freedomchecks.com to learn more.
Ok, so it’s important to clarify something about Freedom Checks. They aren’t a new thing. Matt Badiali is referring to Master Limited Partnerships — or MLPs — when he talks about Freedom Checks. MLPs are a form of company that operates in a very specific way. In 1987, under statue 26-F, Congress created MLPs. MLPs are companies that do not pay federal taxes and in return must pay out 90% of their profits to investors. Because of this distinction, MLPs also work differently for the investor as well. First, MLPs have aggressive tax breaks. MLPs are taxed on capital, not investment, which gives massive tax breaks to the investor. Second, MLPs operate almost exclusively in the oil and gas industry (there are exceptions to this rule). Finally, MLPs typically have higher monthly payments than government programs like Social Security, 401(k), and Roth IRA.
So why is Badiali calling MLPs Freedom Checks? Well, Matt is doing a little branding here. Matt isn’t telling you just to invest in MLPs; he is giving people specific MLPs that he thinks that it’s a good idea to invest in. Under the simple basis that America is starting to export more oil and import less oil, Matt is saying that that investing in the industry should see the investor make significant gains in the future.
The Real Wealth Strategist Newsletter
Matt Badiali’s newsletter, Real Wealth Strategist, may give some insight into which specific companies he is telling people to invest in. Other than that, which is membership only, we can only make guesses. Matt certainly knows what he’s talking about. We are talking about a man who rubs elbows with T. Boone Pickens. He does give some small hints in his videos. One such hint is when he talks about the specific worth of an MLP he is recommending. Almost certainly he is discussing Franco-Nevada (FNV), the king of all gold royalty companies. FNV is already a blue-stock company, which is probably why Matt is mentioning their name first. They don’t pay the biggest dividends in the world (usually around 1%) but they are fantastic at generating revenue.
Other than FNV, speculation is limited. Only subscribers to his newsletter really know which companies he is talking about. In the meantime, it may be of interest to anyone investing in the turbulent world of natural resources to take a look into MLPs. There are more than 568 companies that are currently classified as such, and many of them are giving some impressive gains to investors. Good luck out there! And as always, invest smarter, not harder. Learn more about Freedom Checks at dailyreckoning.com.